BATTLE OVER THE BUDGET

BATTLE OVER THE BUDGET;Major Provisions in Bill To Balance the Budget

By ROBERT PEAR AND MONICA BORKOWSKI

Published: November 17, 1995

WASHINGTON, Nov. 16—
House and Senate negotiators completed their preparation of a vast bill to balance the Federal budget in seven years, and the measure is expected to win approval from both chambers in the next few days. President Clinton has threatened to veto it, but Republicans say they will revive many of its features in later legislation. These are some of the major provisions of the bill.

Medicare

Encourages elderly people to enroll in private health plans including health maintenance organizations. The Federal Government would make a fixed monthly payment to the health plan for each beneficiary who enrolls.

Establishes a new minimum Medicare payment to H.M.O.'s: $300 a month for each beneficiary in 1996 and $350 in 1997.

Permits doctors and hospitals to form their own health plans to serve Medicare patients. These plans would normally be regulated by the states, but doctors and hospitals could appeal to the Secretary of Health and Human Services if a state failed to act within 90 days, or if the state denied an application using standards tougher than those applied to other entities in a similar business.

Relaxes antitrust laws to let doctors exchange information about prices when they are forming a health plan to serve Medicare patients.

Exempts most doctors' office laboratories from Federal regulation. Labs would be subject to regulation if they perform pap smears.

Relaxes prohibitions on doctors' referring patients to medical businesses in which the doctors have financial interests.

Increases monthly premium to about $53.50 next year, from the current $46.10. With no change in current law, the premium would drop to $42.50 a month.

Earmarks $13.5 billion in the next seven years for a new trust fund to finance graduate medical education.

Rejects doctors' pleas for new limits on payments to victims of medical malpractice, letting states write their own laws in this field, as they now do.

Savings: $270 billion over seven years.

Medicaid

Provides a lump sum of Federal money to each state to finance health care for poor people. States would have wide discretion to specify benefits.

Requires states to cover pregnant women and children under the age of 13 in poor families. States must also cover disabled people, but states would define disability.

Increases total pool of available money from $89 billion this year to $127.4 billion in 2002. Growth in spending would be cut in half, to 5 percent a year from the current 10 percent.

Creates a special pool of extra money totaling $627 million next year for the 15 states with the largest numbers of illegal aliens.

Requires nursing homes to meet Federal standards, but the standards would be less strict than under current law.

Allows states to use Federal money to pay for abortion "only if necessary to save the life of the mother or if the pregnancy is the result of an act of rape or incest."

Allows states to cover prescription drugs only if drug manufacturers agree to give discounts on prices.

Savings: $165 billion to $170 billion over seven years.

Welfare

Ends the 60-year-old Federal guarantee of cash assistance for poor children through Aid to Families with Dependent Children. Instead, states would receive fixed grants to to design and run their own programs.

Requires states to continue spending at least 75 percent of what they spend now as a condition of getting Federal welfare money.

Provides extra money to states where the out-of-wedlock birth rate declines.

No family could receive welfare for more than five years. States could set stricter time limits.

Allows states to deny cash assistance to children born to poor unmarried women under the age of 18.

Bars the use of Federal money to increase benefits for women who have additional children while on welfare. State legislatures could override this "family cap."

Legal immigrants who have not become citizens would generally be ineligible for food stamps and Supplemental Security Income. States would have the option of providing cash assistance, Medicaid and social services to such immigrants now in the United States. Future immigrants would be ineligible for most Federal benefits for five years.

Savings: $81.5 billion over seven years.

Earned Income Tax Credit

Reduces eligibility. Affluence testing would include broader definitions of income. People who do not have children will no longer qualify.

Savings: $32 billion over seven years.

Nutrition

Cuts annual cost-of-living adjustment for food stamps.

Allows states to run their own food assistance programs with Federal money, in place of the food stamp program, if they disburse benefits electronically and curtail erroneous payments. States choosing this option would define eligibility.